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Thanks much for the article Oil and communism don't mix: Venezuela faces energy standoff at petroleum company

"...PDVSA has continued to produce far more oil than it needs at a time when exports are down because of the OPEC agreement to reduce supplies. The higher production allows the government to collect higher royalties.

Foreign oil executives, who have about $20 billion invested in Venezuela, are staying out of the fray for now. But analysts say that the new direction bodes ill for future investment, especially as Parra was party to a lawsuit that contested the 1996 return of private oil companies to Venezuela.

"This all runs contrary to PDVSA's six-year business plan, which calls for investing $7.4 billion a year, $4 billion of which is to come from the private sector," says Luis Giusti, former president of PDVSA and a board member of Royal Dutch/Shell Group. "The question is what private sector? Who's going to go into Venezuela now?" ..."

Perfect Arab plan. Keep them to OPEC limits. Disrupt future investment by making Venez "unstable" and unattractive for investment, all the while going full speed with their own development. Chavez is a true friend of the Saudi/Iran/Libya.

I don't think you can blame the Arabs for this one. Chavez is the one who campaigned for production limits.

But in the background, as you mention, he wants to spend $7 billion a year in new investment.

Billions are being spent to bring new oil on line. And, as you mention, he hasn't slowed production at all, he is still producing and just storing it. He is giving some of it away for free. But production is production.

Every other OPEC country is playing the same game. Most of them are producing at their limit. For some of them, the limit is steadily diminishing, because they have not re-invested in their own oil industry, which gives them motive to call for reduced quotas, since they can hardly meet the quota they have now.

Those that can are trying to double their production, while publicly calling for production cuts. It is a sham, and it tells me that OPEC is finished as a force in the world, although the journalists will not figure it out for a few more years.